The Federal Government’s decision to increase the 2025 Appropriation Bill from N49.7 trillion to N54.2 trillion has elicited varied reactions from economic experts. President Bola Tinubu conveyed this adjustment to the National Assembly, citing additional revenues generated by key government agencies, including N1.4 trillion from the Federal Inland Revenue Service, N1.2 trillion from the Nigeria Customs Service, and N1.8 trillion from other government-owned enterprises.
This increase, according to the government, will support its diversification program by investing further in the solid minerals sector and infrastructure projects. The Minister of Budget and Economic Planning, Atiku Bagudu, explained that this adjustment followed a review that identified the potential for increased revenue generation from these agencies.
Economist Marcel Okeke criticized the government’s approach, expressing concern about the timing of the budget adjustments. He argued that such significant changes so late in the process, after the initial budget figures had been released and used by analysts and institutions globally, demonstrate a lack of proper planning and could disrupt economic projections.
He suggested that a supplementary budget later in the year would have been a more appropriate course of action. Paul Alaje, Chief Economist and Partner at SPM Professionals, raised concerns about the impact of the increased spending on the government’s 15% inflation target. He noted that while the additional revenue may be available, injecting such a large sum into the economy could make achieving the inflation goal more challenging.
Tunde Amolegbe, Managing Director of Arthur Steven Asset Management Limited, viewed the budget increase positively, believing it would enable much-needed infrastructural development. He advocated for an ambitious budget, arguing that Nigeria’s per capita budget is significantly lower than that of comparable countries, hindering poverty reduction efforts.
However, he cautioned against excessive borrowing, emphasizing the importance of monitoring debt-to-revenue and debt-to-GDP ratios. Another economist, who wished to remain anonymous, strongly disagreed with the budget increase, arguing that it would worsen the economy, especially with the existing high deficit.
The House of Representatives, however, expressed support for the President’s proposal, citing the additional revenue generated by government agencies. Akin Rotimi, House spokesman, confirmed that the proposal had been referred to the relevant committee for legislative action. Philip Agbese, Deputy spokesman, emphasized the importance of the increased allocation to critical sectors, particularly agriculture, and its potential to enhance food security.
He also highlighted the proposed investment in national security, specifically the construction of barracks for troops. He assured that the House would carefully scrutinize the proposal to ensure efficient and effective allocation of funds.
